March 8, 2013
Authored by: Bryan Cave Leighton Paisner
Social media has become ubiquitous and many banks are wondering if they can survive without a trendy presence on Facebook, LinkedIn, Twitter, YouTube, and in the “blogosphere.” It is a bit of the Wild West out there though, with few rules in place to protect your message. Instead of yelling at the TV at home, a person can post a negative comment about your business for the world to see and, even if unfair and baseless, there may be little you can do about it.
Financial institutions use social media in a variety of ways, including marketing, promotions, account applications, consumer feedback and communicating with new and existing customers. Since these communications occur in an informal and largely unsecured environment, it introduces new risks. If your bank is active in social media, or simply advertises consumer banking or other products through social media, new proposed guidance from the Federal Financial Institutions Examination Council (FFIEC) instructs your bank to adopt compliance policies and procedures governing these activities. Even if your financial institution is not active in social media, you need a process for responding to negative comments or complaints that surface through social media platforms.
This article briefly summarizes the proposed FFIEC guidance.
We encourage all interested banks to submit comments on this guidance by the deadline March 25, 2013.
What are the compliance expectations for banks using social media?
On January 23, 2013, the FFIEC issued a request for comment on a proposed “Social Media: Consumer Compliance Risk Management Guidance.” The intent of the guidance is to help banks, thrifts and non-banks under the supervision of the Consumer Financial Protection Bureau identify, address, oversee and control risk from social media within their overall risk management program.